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PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHVB #0757/01 3051300
ZNR UUUUU ZZH
P 311300Z OCT 08
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC PRIORITY 8733
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 02 ZAGREB 000757 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON EFIS SENV PREL PGOV HR
SUBJECT: GOC WORKS TO OPEN FISHERIES CHAPTER AS FISHERMEN 
FACE DROP IN EARNINGS 
 
REF: ZAGREB 256 
 
¶1. (U)  SUMMARY: At the end of September, the GOC submitted 
its negotiating position for the fisheries chapter of EU 
accession negotiations. The position focuses on maintaining 
Croatia's traditional fisheries, most of which are not 
covered by EU rules.  Although the GOC does not expect major 
objections to its demands, Slovenia is expected to block 
movement on the chapter in order to push tangential bilateral 
issues. In the meantime, the fishing industry has seen a drop 
in real earnings this year, as high fuel prices halted much 
of the fleet in June. A recently-approved 18 million HRK 
($3.2 million) in aid will help fisherman, though they 
continue to seek further support measures from the government 
to counter the handicap of an old and inefficient fleet. End 
summary. 
 
¶2. (U) After conceding defeat in the political stand-off with 
Slovenia over its Ecological and Fisheries Protection Zone 
(ZERP) early this year and revoking application of ZERP 
regulations for EU countries (reftel), Croatia has continued 
working to open the fisheries chapter for EU accession 
negotiations with relatively little public attention. At the 
end of September, the GOC decided on its negotiating position 
and submitted it to the EU. Neda Skakelja, director for 
fisheries at the Ministry of Agriculture, Fisheries, and 
Rural Development, told us the backbone of Croatia's position 
is the preservation of small-scale traditional fisheries, 
considered an important part of Croatia's coastal heritage. 
Several of the demands focus on ensuring that Croatian 
fisherman may continue using traditional fishing methods. 
Skakelja said these methods are not covered in the EU's 
acquis, since the EU's Common Fisheries Policy was developed 
based mainly on Atlantic, not Mediterranean, fisheries. She 
said changes to the traditional fisheries would not have a 
large economic effect on the industry as a whole but could 
have a large effect on individuals and small fishing 
communities along the coast. 
 
¶3. (U) One Croatian demand with a larger potential impact on 
the industry is that Croatia be allowed to maintain its tuna 
quota as set by the International Commission for the 
Conservation of Atlantic Tuna (ICCAT). With an annual quota 
of 833 tons, the $150 million bluefin tuna catch represents 
about 90 percent of the value of Croatia's fish exports. 
Under the ICCAT regime, the European Commission receives a 
lump quota for all member states and could redistribute part 
of Croatia's quota when it joins. Skakelja said, however, 
that quota maintenance is not an unusual demand for aspirant 
countries and should not pose a problem. 
 
¶4. (SBU) The European Council is now preparing the EU's draft 
common negotiating position, which will stipulate benchmarks, 
if any, and which must be approved by all EU member states 
before being delivered to Croatia. The GOC does not expect 
major objections from the EU and hopes the EU will provide 
its position by the end of the 2008. However, Martin Mayer, 
political advisor at the European Commission Delegation to 
Croatia, told us Slovenia intends to hold up the fisheries 
chapter to push for resolution of bilateral border issues. 
Skakelja said further resistance by Slovenia would not 
surprise her, although she could not see any elements of the 
actual negotiating position with which Slovenia could 
justifiably disagree. 
 
¶5. (U) While work on the fisheries chapter has moved slowly 
forward, Croatia's fishermen have had a difficult year. 
Skakelja told us high fuel prices halted much of the fleet in 
June. Average net monthly earnings for the industry for 
January through August 2008 were 4030 HRK ($707), which are 
about 20 percent below the national average and represent a 
drop from the same period in 2007 when adjusted for 
inflation. In response, the GOC recently approved 18 million 
HRK ($3.2 million) in aid to the industry, to be given as 
grants to legal and physical persons eligible under the 
Agriculture and Fisheries Subsidies Act. The industry has 
also asked for a reduction in the value-added tax on fish and 
seafood, greater subsidies to lower the price of the "blue 
diesel" reserved for the industry, and the right to pension 
benefits after 30 years of working in the industry, 
regardless of age. None of these measures directly address 
one of the industry's major underlying problems: the old age 
and inefficiency of most of its vessels. The GOC has little 
room to act in this regard, however, as the EU prohibits the 
use of public funds to update the fleet. 
 
¶6. (SBU) COMMENT: The fisheries chapter has all along been a 
focus of Slovenia's efforts to leverage Croatia's EU 
accession into forcing a resolution of the outstanding border 
issues and, unlike several other chapters Slovenia is 
blocking, has at least a tangential connection to the 
 
ZAGREB 00000757  002 OF 002 
 
 
question of the maritime border. As the border issues are 
unlikely to be resolved in the next few months, adoption of a 
draft EU common position by the end of the year would require 
significant EU pressure on Slovenia.  Regardless of that 
outcome, Croatia's fishermen will continue to struggle to 
compete with other larger, more modern European fleets for 
declining fish populations. 
Bradtke